Scientists have always been nomads, and the variety of surnames and accents in Britain's laboratories is testament to this country's appeal to researchers from around the world. But the UK is increasingly losing out to foreign rivals when it comes to attracting the best brains.

Now, faced with deep cuts to research budgets in the government's spending review, there is mounting concern over the flight of the most gifted researchers as the US, Canada and countries in east Asia plough money into science.

Nick Wright, pro vice-chancellor for research at Newcastle University, said there was anecdotal evidence that younger researchers were starting to turn away from Britain. "Newcastle over the last few years has recruited a lot of very high-calibre people from Germany but the German research excellence initiative has produced a huge number of new posts and funding there. At the moment, we're not getting any applications from Germany."

Wright said one of the strengths of UK universities had always been the strong international mix in faculty staff. "In the long run, I think it's sad that that will go down. If you want the research in the UK of the highest international standard, it's very hard to see that being possible if we don't have significant numbers of staff from overseas. It's not credible to believe that we're going to do that on a purely UK basis. We have to concentrate in particular research areas and it's impossible to believe that all of the talent in that particular area will be generated in the UK."

Wright said international collaboration would not compensate for the potential losses. "If you're content with being a second-rate nation, you can live off the research of other people," he said. "If we want to remain in the forefront of the world, we need to be generating knowledge, not absorbing it second-hand."

Southampton, a member of the elite Russell Group of research-intensive universities, has begun to close or scale down departments where research is not "world class" as part of an ongoing effort to ensure its teaching is underpinned by leading academics. In the past year, vice-chancellor Don Nutbeam has decided to close the department of sports science and to end undergraduate courses in social work.

Nutbeam said other vice-chancellors were following suit in anticipation of a future where universities are more diverse and specialised. "We have taken a tough view of what it is we are genuinely internationally competitive at," he said.

The gulf between Britain and other rich countries was driven home when he sought to recruit an Australian academic. "I wince when I look at his current salary package and the kind we might typically offer here. Whereas 18 months ago there was a pretty close comparison in salaries at professorial level between the UK and Australia, there is now something like a 40% difference." He warned that deep budget cuts on top of the falling exchange rate would lead to "an insidious grinding down of the UK research community".

Universities are vulnerable in the spending review because the Department for Business, Innovation and Skills is the biggest in Whitehall without a protected budget. Science funding is one of the biggest components of that budget.

The department acknowledged that Britain had historically benefited from a net inward migration of research staff. "The government recognises the importance of ensuring that the UK continues to be a world-leading place to do science.

"Research, technology and innovation will play a key role in rebalancing the economy and we want science to emerge from these tough economic times to be strong, sustainable and effective. That's why we are committed to making the economic case for science and innovation … Public spending on science, just like everything else, has to stand up to rigorous economic scrutiny. In these austere times, the public should expect nothing less."

One forecast of the UK's future research landscape, drawn up by a science policy magazine, outlines a model for government cuts in which Britain's universities would become heavily stratified.

The prediction by Research Fortnight describes a future in which some universities are shut out of science research altogether, while funding is concentrated on the most internationally renowned departments. However, even many of Britain's elite universities would lose huge sums every year: Newcastle University would lose more than £4m and Liverpool more than £3.5m. Many others – including London Metropolitan University, Bournemouth and Lincoln – would see funds dry up completely.

The magazine analysed the impact of potential cuts based on the existing formula for distributing government funds to universities. The analysis was based on cuts to a portion of the total taxpayer funding for research.

In a recent speech, the skills secretary, Vince Cable, said his preferred option would be to concentrate funding on research identified as "world class". "My preference is to ration research funding by excellence and back research teams of international quality – and screen out mediocrity – regardless of where they are and what they do," he said. A second scenario considered by Research Fortnight, based on these comments, suggests that around 30 university departments would lose funding altogether.

The inventor Sir James Dyson, author of a report for the Conservatives on UK manufacturing, urged scientists to "do more with less". "The UK trails Japan, China, Germany, South Korea and France in spending. UK science is going to take some of the hit in the austerity cuts … We need to make money by turning research into something we can patent and sell – more emphasis on development," he said.

Dyson has proposed that companies willing to invest in research should be rewarded with tax incentives "so universities don't face a double budget squeeze". "In times of austerity commercial research must come to the fore by necessity, but it need not be detrimental," he said.

Responding to comparisons with other developed countries, David Cairncross, senior policy adviser on innovation at the CBI, had blunt advice. "We're not in the same fiscal position as most other OECD member states. We have to cut our coat according to our cloth."

Science funding abroad

US Science funding will rise in the 2010 budget, with health and human services department spending up to $81.3bn from $79.6bn last year.

Germany According to the Royal Society, although government expenditure will be cut from €319.5bn this year to €307.4bn in 2011, the federal science budget is going to increase. The education and research ministry will have €780m more to spend, a 7.2% increase on the current €11.65bn budget.

Canada The government plans to invest $800m as part of its fiscal stimulus plan, and an additional $2.8bn into green technology initiatives.

France Earmarked spending for higher education and research increased by 5.3%, to €29.2bn from €27.7bn in 2009.

Australia The government plans to invest $A2.9bn as part of its long-term fiscal stimulus plan, with a further $A5.7bn invested into green technology initiatives.